GBP/USD eyes 1.2600 despite consistent US consumer spending support Fed rate hike

GBP/USD is looking to capture 1.2600 despite an extended recovery in the US Dollar Index.
Resilience in US consumer spending for core goods and services supports more rate hikes from the Fed.
UK’s inflationary pressures are showing no signs of deceleration amid a labor shortage and consistently elevating food prices.

Sagar Dua FXStreet

The GBP/USD pair is aiming to claim the round-level resistance of 1.2600 in the Asian session. The Cable has corrected marginally after failing to sustain above 1.2580. However, the scale of correction in the Cable is critically low in comparison with the recovery in the US Dollar Index (DXY), which indicates that Pound Sterling is holding some strength.

S&P500 futures have trimmed losses generated in early Asia as investors are focusing again on solid quarterly results reported by United States tech-savvy companies. A recovery in the risk appetite of the market participants is expected to improve the appeal for risk-perceived assets.

The USD Index is facing barricades in extending its recovery above 101.80. The greenback index slipped sharply on Friday despite a consistent increase in consumer spending. March’s core Personal Consumption Expenditure (PCE) Price Index landed at 0.3%, consistent with consensus and the former release. Resilience in spending outlays for core goods and services indicates that inflation would remain persistent and the Federal Reserve (Fed) is needed to stay affirmed on its path of policy-tightening.

On Monday, US ISM Manufacturing PMI data will be in focus. Investors are anticipating mild gains in PMI figures to 46.6 vs. the prior release of 46.3. New Orders Index data that indicates forward demand is expected to jump to 45.5 from the former release of 44.3.

On the Pound Sterling front, the street is anticipating that the Bank of England (BoE) will keep its policy-tightening spell continuing to arrest United Kingdom’s double-digit inflation figure. UK’s inflationary pressures are extremely stubborn and showing no signs of deceleration amid a labor shortage and consistently elevating food prices.

GBP/USD

Overview
Today last price	1.2557
Today Daily Change	-0.0012
Today Daily Change %	-0.10
Today daily open	1.2569

Trends
Daily SMA20	1.2451
Daily SMA50	1.2251
Daily SMA100	1.2212
Daily SMA200	1.194

Levels
Previous Daily High	1.2584
Previous Daily Low	1.2446
Previous Weekly High	1.2584
Previous Weekly Low	1.2387
Previous Monthly High	1.2584
Previous Monthly Low	1.2275
Daily Fibonacci 38.2%	1.2531
Daily Fibonacci 61.8%	1.2499
Daily Pivot Point S1	1.2482
Daily Pivot Point S2	1.2396
Daily Pivot Point S3	1.2345
Daily Pivot Point R1	1.262
Daily Pivot Point R2	1.267
Daily Pivot Point R3	1.2757

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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